Comments on: Ask the cubicle expat: Can I really make more dough working solo?

By: The Anti 9-to-5 Guide » Nifty freelance rate calculator

The Anti 9-to-5 Guide » Nifty freelance rate calculator — Tue, 31 Jul 2007 11:22:07 +0000

[...] AlmostGotIt’s comment on a recent post of mine raises a question I hear a lot: How much more should I charge as a freelancer? Is there a hard-and-fast rule or formula? I’ve also heard a variety of percentages we freelancers should be charging above the corresponding employee rate — 30% more, 40% more, 50% more, etc. (Here’s one take on what to charge.) [...]

By: Michelle Goodman

Michelle Goodman — Tue, 31 Jul 2007 10:24:22 +0000

AlmostGotIt, thanks for weighing in. Just want to clarify a few things you bring up. The U.S. self-employment tax is not 30% of your net income — it’s approx 15% of your GROSS income. Basically, it’s the money an employer would have put toward social security and medicare for you; but now that you’re your own employer you must pay this. I think people think this tax is 30% because any U.S. worker — self-employed or employee — gets taxed 15% of their gross income toward social sec and medicare already. Here’s what the IRS has to say on self-employment tax:

http://www.irs.gov/businesses/small/article/0,,id=98846,00.html

As for how much more you need to make as a solo worker, I’ve heard all different percentage rates. I would just go with how much you personally need to make to cover all your benefits and expenses. Here’s a nifty calculator that can help:

http://freelanceswitch.com/rates/

By: almostgotit

almostgotit — Fri, 27 Jul 2007 01:24:28 +0000

…don’t forget self-employment tax, which will eat about 30% of your net income! On the flip side, you can subtract all of your business expenses, dollar for dollar, from your gross. In other words, this year (my first, post-cubical) I am deducting my computer, software, peripherals, cell phone, etc… and so will probably end up easily “expensing” away my entire taxable income.

I think the rule of thumb (forgive me if you’ve blogged about this already –?) is that a self-employed person must earn 140% as much per hour as an employed person to net the same income. A figure which may be low, given all the other expenses (many of which are suggested in this post) that one can have as well… PLUS the fact that most of us tend (esp at first? out of guilt?) not to bill for every hour we actually work.

Important stuff to keep in mind!

Obviously, I’ve chosen this route anyway For now. No promises, however, and like my hair-color, I always reserve the right to change my mind later.

By: Michelle Goodman

Michelle Goodman — Thu, 26 Jul 2007 12:46:41 +0000

thanks, amy — another great point! so glad you found your way back out of the cube and are getting paid a better wage.
i agree with you on juggling a couple of niches (bread-and-butter niche + passion niche = more stable income). i always recommend having 2-3 niches; that way, you don’t get bored, you can balance the lower-paying ones with the more moneyed ones (i do this: publishing = low; high-tech = well, high), and you always have a fallback if one industry experiences a slump.

i suspect that even as a self-described generalist you have just a handful of industries/subject matters you focus on, no? otherwise, it’s hard to excel at anything if you’re always picking up a new industry/subject with each project…

[as an aside, check out this interesting media bistro post on paltty publishing salaries for those on the end of the totem pole:

http://www.mediabistro.com/galleycat/publishing/what_are_we_going_to_do_about_the_gender_salary_divide_63634.asp ]

By: Amy T

Amy T — Wed, 25 Jul 2007 23:37:41 +0000

I left my job several years ago, mid-career, and tried freelance publicity and editorial work. Since I had been working in the book publishing business, I thought I needed to keep book publishers as clients. But the book biz is the lowest paying industry around, dishing up even more paltry paychecks to freelancers. My mistake was choosing clients solely in the book biz rather than diversifying.

Not surprisingly, I wound up back in a full-time job for financial reasons.That job was NOT in the book biz, and so when I left to relaunch my freelance business, I was able to establish a wider variety of clients .

I personally like to keep that variety; it keeps things interesting. Yes, I know that specialization is good for business, but I enjoy being a generalist–someone who can tackle nearly any project with enthusiasm. This does mean that I get asked to do some random things sometimes, admittedly….

All that said, travel industry work has definitely the most enjoyable work I’ve done. If I had to specialize, I’d hone in on travel marketing.

By: Michelle Goodman

Michelle Goodman — Tue, 24 Jul 2007 12:46:56 +0000

EC, great point. the more specialized, the more employable… would love to hear what niches others have gotten into. i’ll start: my name is michelle and i often work as a tech writer/editor. my other niches/subject matter specialities: dogs, alt careers, personal growth.

By: Elizabeth Cockle

Elizabeth Cockle — Mon, 23 Jul 2007 19:58:38 +0000

In my experience as a self-employed copywriter and editor, having an industry niche is an important part of financial success in a post-cube work life.

Like Michelle, I started out in publishing and found that I could earn more on my own, even with a general mix of clients. But developing a niche in professional services marketing has been a major boost to my business, allowing me to earn at least as much I would as an in-house writer.

While it can take a few years to gain expertise in a niche, the effort is definitely worth the results!